’Bid-riggers must pay more’

THE South African Local Government Association wants construction firms involved in bidrigging for 2010 World Cup infrastructure projects to pay up.

The association reached an agreement with affected municipalities on pursuing civil claims against construction firms for collusive-tendering practices.

The affected municipalities are all nine Fifa World Cup host cities, which upgraded existing facilities or constructed new stadiums and roads for the football showpiece.

The decision to sue comes after the Competition Commission announced two weeks ago that construction firms had agreed to pay R1.5-billion in penalties.

Salga’s chief of operations, Lance Joel, said the penalties amounted to only between 1% and 5.7% of the 2010 annual turnovers of the 15 companies that accepted the penalty settlements.

“These fines are lower than the 10% [of annual turnover] that can be imposed as a penalty,” Joel said.

He said the commission also agreed to negotiate with the firms and attempt to reach an agreement on damages before the competition tribunal proceedings are finalised.

“This option has a clear advantage which relates to the fact that municipalities are able to settle and get their monies more quickly,” Joel said. “It’s better to speak with one voice.”